Volatility rocks Asia and markets end mixed

V.Phani Kumar

HONG KONG (MarketWatch) -- Asian markets ended on a mixed note Tuesday after a volatile session sent several indexes swinging between positive and negative territory.

Japan's two main indexes ended lower for an eighth day, led by commodity traders such as Marubeni Corp. Property counters such as Sun Hung Kai Properties rescued Hong Kong listed shares from intraday lows, even as China-related issues such as PetroChina Co. extended losses.

Hong Kong's Hang Seng Index ended 0.5% higher at 27,803.35 after dropping as low as 26,952.94 during the session. The 40-constituent index lost 3.9% in the previous session. The 43-issue Hang Seng China Enterprises Index gained 0.2% at 16,694.08.

Castor Pang, a strategist at Sun Hung Kai Financial in Hong Kong, said the overnight fall on Wall Street as well as American depositary receipts of Asian firms pressured stocks. He said a short-term rebound was expected after the Hang Seng lost more than 4,000 points from its recent highs.

"Overall, sentiment is still bearish in the short term," said Pang.

Analysts also said fund inflows from mainland China were also likely to remain strong.

In a note to clients, HSBC analysts wrote that despite the delays in implementing the proposal to allow individual Chinese investors to directly buy Hong Kong stocks, the approval process for mainland funds to invest in Hong Kong markets has accelerated.

China's Shanghai Composite closed 0.6% lower at 5,158.12, registering its fourth straight lower finish, on late selling. It rose as high as 5,311.70 during the day.

The fall came after data showed that the country's consumer-price inflation rose 6.5% in October from a year ago, matching the 11-year high recorded in August, and raising fears that the central bank may continue to tighten its monetary policy in coming weeks.

Tokyo stocks inch further down

In Tokyo, the Nikkei 225 average dropped 0.5% to 15,126.63, after it fell as low as 14,988.77, a level it hasn't seen since June 2006, during the session. The broader Topix index slipped 0.1% to 1,454.73. Both indexes fell for the eighth straight session, rocked by worries related to U.S. financial markets and a strengthening yen.

The decline came despite government data that showed that Japan's economy expanded by a higher-than-expected 0.6% during the July-September period from the previous quarter, after adjusting for prices.

Separately, the Bank of Japan left a key policy rate unchanged at 0.5%, as expected.

In other news from Tokyo, Japan's lower house of parliament Tuesday passed a contentious bill to resume the country's refueling mission in the Indian Ocean, in support of the U.S. anti-terrorism operations in and around Afghanistan, the Nikkei business news reported in its online edition.

The bill will now be sent to the upper house, which is dominated by members of the opposition Democratic Party of Japan. The opposition is gearing up to vote down the bill in that house, according to the report.

In currency trading, the U.S. dollar recently climbed 0.2% to 109.86, after rising as high as 110.52 yen earlier in the day. The Australian dollar jumped 1.8% to 98.15 yen and the British pound gained 0.9% at 227.08 yen.

Regional detail

Financials ranked among gainers as investors looked for bargains, with shares of National Australia Bank (NAB) rising 1.6% and Commonwealth Bank of Australia (CBA) advancing 1.8% in Sydney, while in Seoul, shares of Industrial Bank of Korea gained 2.3%.

Shares of Macquarie Group (MQG) dropped 3.7% in Sydney, after it lowered its outlook for the fiscal second half, although it reported a higher than expected growth in profits for the first half.

In Hong Kong, resources were among the day's biggest losers, hurt by a correction in the prices of oil and gold. Shares of Jiangxi Copper (358) dropped 2% and PetroChina Co. (857)
PTR, -2.96%
lost 1.7%.

Crude oil for December delivery fell as much as 43 cents to $94.19 a barrel, after dropping $1.70 to $94.62 a barrel on the New York Mercantile Exchange Monday. December gold futures lost as much as 90 cents to $806.80 an ounce, after dropping $27 to end at $807.70 an ounce on the Nymex overnight.

Monday on Wall Street, the Dow Jones Industrial Average
DJIA, -1.56%
fell 55.2 points to 12,987.50, closing below the 13,000-point level for the first time in nearly three months. The S&P 500
SPX, -1.66%
dropped 14.52 points to 1,439.18 and the Nasdaq Composite
$COMPX
declined 43.81 points to 2,584.13.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.